Introduction
The French Tax Authority, Directorate General of Public Finance (DGFiP), has announced that organisations must implement e-invoicing and e-reporting starting from 1st July 2024. However, the authority has delayed the e-invoicing initiative scheduled for 2024. Keep in mind that the government has already implemented e-invoicing for Business to Government (B2G) transactions since 2017 in different phases till January 2020 with the national e-invoicing platform "Chorus Pro". These e-invoicing initiatives are part of the country's efforts to curb tax fraud by transmitting business transaction data to the tax authorities. This article explains everything about e-invoicing in France, its timelines, and many more. Keep reading.
E-invoicing in France: A quick overview
The French government is mandating e-invoicing for domestic B2B and B2G transactions and e-reporting for domestic and international B2C transactions. Furthermore, electronic reporting and payment details are also mandated for international B2B transactions. All businesses registered under the country's Value Added Tax (VAT) must comply with this mandate, as stated in Article 152 of 2020 of French Finance Law. The e-invoices will be exchanged using the mandated formats: UBL 2.1, UN/CEDACT CII, and Factur-X.
The mandatory channels for e-invoicing in France are:
- Portail Public de Facturation (PPF)
- Approved Partner Dematerialisation Platforms (PDP)
- Dematerialisation Operators (OD)
How the process of e-invoicing works in the country
As per the new reforms. Electronic invoices must be generated and transmitted via specific channels that meet regulatory requirements. Here's what you need to know:
For B2G transactions
Every French business supplying a public entity must send structured e-invoices through the national invoicing portal, known as Chorus Pro. Currently, if you're not able to send invoices electronically through XML, Chorus Pro offers a web portal for manually entering invoice data, sending invoices, and checking invoice and payment status.
While Chorus Pro acts as the primary platform for e-invoicing in France, using it requires a clear understanding of the French administrative context, knowledge of tax regulations, and, more importantly, proficiency in the French language.
For B2B transactions
Organisations that fall under the B2B sector will have three options for sending and meeting e-invoicing and e-reporting requirements by 2026.
Partner Dematerialisation Platform (PDP)
Like the B2G sector, B2B can use the services of Partner Dematerialisation Platform (PDP) for electronic invoicing and reporting. In this scenario, a solution provider interfaces with the Chorus Pro and handles both invoice transmission and mandatory transaction data reporting to the county's tax authorities.
Dematerialization Operators (OD)
Organisations can also select the services of Dematerialization Operators (OD), which function similarly to PDP. However, keep in mind that these service providers cannot directly issue or receive invoices without using the Public Invoicing Portal (PPF) as a mediator.
Public Invoicing Portal (PPF)
Businesses can use the PPF without relying on PDPs or ODs. The PPF can be utilised or accessed manually through a web portal or integrated via API and EDI.
Implementation timeline for e-invoicing in France
- From September 2026, all companies, irrespective of their sizes, operating in the country will have to comply with the e-invoicing and e-reporting mandates, and every taxpayer must be able to accept and receive e-invoices.
- Small taxpayers will have to fully comply with these mandates from 1st September 2027.
Are there any penalties for non-compliance?
If an applicable business does not comply with the country's e-invoicing rules and regulations, it will have to pay the following penalties:
- For e-invoicing, the penalty per instance is €15 per invoice, and the maximum penalty is €15,000 per year.
- For e-reporting, the penalty per instance is €250 per transmission, and the maximum penalty is €45,000 per year.
What is the impact of e-invoicing on organisations in France?
The mandatory shift towards e-invoicing in France represents both challenges and opportunities. Selecting the platforms to send e-invoices to tax authorities is only one of the early steps.
For example, the implementation of electronic invoicing will need initial investment in new technology and employee training. That's why businesses will have to upgrade their invoicing processes and ensure that their ERP systems are ready for this change. Furthermore, organisations also need to understand the new e-invoicing and e-reporting process.
With all the roadblocks in mind, e-invoicing also provides some significant benefits. Take the automation process as an example. With automated invoicing, businesses can reduce invoicing errors, speed up their payment process, and improve their overall cash flow. Moreover, electronic invoicing helps simplify VAT reporting and compliance, reducing the administrative burden.
By transforming their invoicing workflow with the help of e-invoicing, organisations can also gain real-time insights into their financial operations, allowing them to make more informed business decisions.
Navigate e-invoicing in France with SAP DRC
If you are looking for an automated solution that keeps your business compliant with the ever-evolving regulatory landscape, from real-time reporting to efficient document management, then SAP DRC is the right solution for you. In fact, the solution enables you to create, process, and monitor electronic documents and periodic reporting. Moreover, it helps you ensure that your business is in compliance with the local legal framework and regulations, such as e-invoicing in France. This unified solution supports different countries and languages, offering a detailed and consolidated approach to managing documents. The most interesting thing about this solution is that it provides complete access and visibility to the reporting, further enhancing clarity and transparency.
Additionally, with SAP DRC for electronic invoicing and reporting, you can assure 100% compliance with the constantly changing regulations. The solution also helps you maintain the accuracy and consistency of the information stored within the ERP system.